"Women proved themselves in many workplaces and today we want them to have a strong presence in decision-making positions in our institutions," Sheikh Mohammed tweeted.

Very few nations have implemented such far-reaching regulations to ensure women are represented on boards of directors.

Norway became the first country to introduce board gender quotas in 2003. There, if a board has more than nine directors, each gender must be represented by at least 40 per cent of directors. In Europe, Italy, France, Belgium, Spain and Iceland have also introduced quotas.

Elsewhere, Malaysia last year announced it would be compulsory from 2016 for women to have 30 per cent representation in decision-making positions.

India has proposed to make it mandatory for companies with five or more independent directors to have at least one woman director.

The Dubai Women Establishment (DWE) held a conference last month on the topic, discussing how to increase female representation on boards; women hold only 1.5 per cent of board positions in listed companies in the GCC.

Shamsa Saleh, the DWE chief executive, said the Cabinet decision was "the most important news in the history of Dubai Women Establishment".

"We recommended this policy last month in our forum and it's been implemented this month," she said.

"It means that we have succeeded and Sheikh Mohammed is very happy about it."

Details of the new policy were not immediately available, but Ms Saleh said it is likely to recommend a ratio of women. The timing of Sheikh Mohammed's announcement was a surprise to her, so she did not know which parts of the policy the Cabinet had approved, she added.

"But the announcement of the policy itself, it's an achievement for women in the UAE," she said. "It's an achievement in the history of women. Most of the countries in the world do not implement this - just a few countries. And we are one of the few countries."

Maha Al Mansouri, the associate director of human resources, at Masdar, also said she was surprised by the news but "really excited" to hear about the decision.

"This recognises women's efforts and helps involve them in the decision-making process," she said. "It will also help increase competition between the two genders."

The decision was made at a Cabinet meeting to approve a draft law on small and medium enterprises (SMEs).

As well as tweeting about women's representation on company boards, Sheikh Mohammed also used the social media tool to outline various other components of the new law.

He said it included the establishment of a SME council and the provision of incentives in several areas to business owners. He did not say what these were.

The law also aims to "prepare a new generation of financially independent Emirati businessmen so they can contribute to our economy," he tweeted.

Addressing the young people of the UAE, he said he held big ambitions for them.

"Your small businesses will grow and you will be the future leaders of the private sector," he wrote.